GlaxoSmithKline and Human Genome Sciences have entered into a definitive agreement under which GSK will acquire HGS for approximately $3 billion in cash, and represents a premium of 99% to the HGS closing price of $7.17 per share on April 18, 2012. The boards of directors of both companies have approved the transaction.

Through complete ownership of BENLYSTA, albiglutide and darapladib, GSK plans to simplify and optimize R&D, and commercial and manufacturing operations. GSK expects to achieve $200 million in cost synergies to be fully realized by 2015. GSK also assessed the potential returns of this acquisition relative to its long-term share buyback program. As part of this ongoing program, GSK continues to expect to repurchase £2-2.5 billion in shares in 2012.

Sir Andrew Witty, chief executive officer of GSK, said, “We are pleased to have reached a mutually beneficial agreement with HGS on friendly terms and believe the combination of GSK and HGS represents clear financial and strategic logic for both companies and our respective shareholders. The transaction meets GSK’s strict financial criteria for acquisitions, and we expect will deliver significant returns over the long-term. This is a natural next step in our nearly 20-year relationship with HGS, and we look forward to working with HGS to integrate our businesses and to realizing the full value of BENLYSTA, albiglutide, and darapladib for the benefit of patients and our shareholders.”

H. Thomas Watkins, president and chief executive officer, HGS, said, “After a thorough analysis of strategic alternatives, HGS has determined that a combination with GSK is the best course of action for our company and the best way to maximize value for our stockholders. HGS has had a long and productive working relationship with GSK, and together we will be uniquely positioned to achieve the full potential of BENLYSTA and other products in our pipeline for the benefit of those battling serious disease around the world. I would like to thank the dedicated employees of HGS, who have worked tirelessly to achieve breakthrough results and are the foundation of our success. We look forward to working with GSK to ensure a seamless transition for all of our stakeholders.”